'What happened two weeks ago shocked us all,' says Julia Cross, who works for the local authority in a small town in Crete. Photograph: Yannis Behrakis/REUTERS

Readers are sending me their stories. This from Julia Cross, who works for the local authority in a small town in Crete.

"We're pared to the bone but we've managed to keep our sports and arts programmes going and the nursery schools and senior citizens' facilities are running by the skin of their teeth.

"Our wages are 40% down, but we love our community so we work hard to find ways around the red tape, live from day to day and try not to think too hard about what might be round the corner. But what happened two weeks ago shocked us all. Indeed it could be said to be a microcosm of the wider Greek problem.

"A local family won a 20-year-old land dispute with the council and took €2.4m from our financial reserves of not much more. The council is widely blamed for mismanagement of the case. As we cannot get a loan and funds from central government have all but dried up, we are effectively on our own.

"The mayor has given us three unpalatable choices: 1. Each household pays for the shortfall with a steep tax on the water bill. 2. Council staff go without pay. 3. We stop refuse collection and the tending of all public spaces. The arguments are long and heated.

"The family cannot be held responsible as they won their case fairly in court, but they are the focus of much anger and I imagine they will soon have to close their businesses and leave the area. A pyrrhic victory indeed. And meanwhile our little community feels ever more adrift in a large, dark sea of uncertainty."

• Jon Henley is in Greece telling real people's stories. Please contact him if you have suggestions for people he could see or places he could visit, or send him your personal story (not too long, please …). He will post as much as he can on the blog. Jon can be contacted on Twitter (@jonhenley) where the hashtag for this series is #EuroDebtTales, or by email (jon.henley@guardian.co.uk).

Jon Henley is in Greece telling real people's stories. Please contact him if you have suggestions for people he could see or places he could go, or send him your personal story. Jon can be contacted on Twitter (@jonhenley) where the hashtag for this series is #EuroDebtTales, or by email (jon.henley@guardian.co.uk)